topic Re: Pay off CC Balance, all three bureaus drop score 7 points? in Understanding FICO® Scoring

Pay off debt, FICO Score Drops and other things.

Insoc — Thu, 23 Feb 2017 15:48:43 GMT

**UPDATED/CORRECTED INFO**

So I paid off a balance on my one of my three credit cards, around $400 to bring it to $0.

I have the monthly FICO monitoring system with 3 scores, I get an alert that my scores dropped 7 points with Equifax, there are three alerts tied to Equifax only at the moment.

Why is this? I thought having lower utilization = better scores?

Re: Pay off CC Balance, all three bureaus drop score 7 points?

newhis — Wed, 22 Feb 2017 19:07:19 GMT

You need at least 1 card reporting a small balance and others $0 to get most points for your profile.

If your only card report $0, you lose points.

Re: Pay off CC Balance, all three bureaus drop score 7 points?

SouthJamaica — Wed, 22 Feb 2017 19:39:41 GMT

@Insoc wrote:
So I paid off a balance on my one CC, aroundr $400, Fico reports an alert that my scores dropped 7 points at all three bureaus. Why is this? I thought having low utilization = better scores?

I don't know how it works when you have just one credit card. But in my view, even if you did definitely lose 7 points because you reported a zero balance, it's worth it to have a zero balance 7 points is not that big a deal.

You could experiment. Let it report $50 one month, and zero another month, and see which one gets you the best score.

Re: Pay off CC Balance, all three bureaus drop score 7 points?

Anonymous — Wed, 22 Feb 2017 19:56:45 GMT

@newhis wrote:
You need at least 1 card reporting a small balance and others $0 to get most points for your profile.
If your only card report $0, you lose points.

^ This.

You can solve the problem by adding one or two credit cards, as you find ones you really like. Then you will be able to have two cards reporting $0 (which FICO will like) and at least one card reporting a small positive balance (which FICO will also like).

In the meantime, you will be fine if you keep your balance reporting a small number. You can do that by paying your card down to $5 maybe a week before your statement prints. You'll want to have a total utilization in the region of 1-8% for maximum scoring points.

Re: Pay off CC Balance, all three bureaus drop score 7 points?

Insoc — Wed, 22 Feb 2017 20:50:45 GMT

@newhis wrote:
You need at least 1 card reporting a small balance and others $0 to get most points for your profile.
If your only card report $0, you lose points.

That's the problem I have two other CC's that have a balance, one is over $2K, the other $500.

I have the Fico Monthly Monitoring service and it gave me the alert, all three drops are related to my Merrick Bank CC which is the one I paid off.

Re: Pay off CC Balance, all three bureaus drop score 7 points?

Insoc — Wed, 22 Feb 2017 20:51:36 GMT

@SouthJamaica wrote:
@Insoc wrote:
So I paid off a balance on my one CC, aroundr $400, Fico reports an alert that my scores dropped 7 points at all three bureaus. Why is this? I thought having low utilization = better scores?
I don't know how it works when you have just one credit card. But in my view, even if you did definitely lose 7 points because you reported a zero balance, it's worth it to have a zero balance 7 points is not that big a deal.

You could experiment. Let it report $50 one month, and zero another month, and see which one gets you the best score.

I don't have one credit card, I have 3 cards total right now, the other two have balances. Not 0% UTI

Re: Pay off CC Balance, all three bureaus drop score 7 points?

Insoc — Wed, 22 Feb 2017 20:52:58 GMT

@Anonymous wrote:
@newhis wrote:
You need at least 1 card reporting a small balance and others $0 to get most points for your profile.
If your only card report $0, you lose points.
^ This.

You can solve the problem by adding one or two credit cards, as you find ones you really like. Then you will be able to have two cards reporting $0 (which FICO will like) and at least one card reporting a small positive balance (which FICO will also like).

In the meantime, you will be fine if you keep your balance reporting a small number. You can do that by paying your card down to $5 maybe a week before your statement prints. You'll want to have a total utilization in the region of 1-8% for maximum scoring points.

I want to add another card, but I'm trying to bring up my score to make sure I'm going to qualify.

Like stated, I have a total of three credit cards, the other two have balances so I'm not seeing 0% UTI

Re: Pay off CC Balance, all three bureaus drop score 7 points?

newhis — Wed, 22 Feb 2017 21:11:39 GMT

So if you have other cards with balance then that's not the problem.

Maybe paying your card triggered an alert, but the drop is not related to that.

Re: Pay off CC Balance, all three bureaus drop score 7 points?

Anonymous — Wed, 22 Feb 2017 21:27:41 GMT

Hey Insoc. In case you are baffled by why everybody assumed you had one credit card, it's because you used the phrase "my one CC" in your original post. Thanks for following back up and clarifying that you had three.

Newhis is right. The act of paying off that particular card caused whatever credit monitoring system (CMS) that you use to send you an alert, notifying you that your balance had changed on that card. The alert also made your CMS pull your credit score again, which apparently had gone down.

But whatever made your score go down in the last several days had already happened before the CC balance was paid off -- it's just that whatever that was wasn't an alertable event.

You mention that you want to raise up your score so that you can get a fourth card. The best way to do that is to pay off another card and pay the remaining card down as much as you can (but leave a positive balance on it). This might take you a while, but if so that's ok. Just keep working at it. The goal for any person should be to owe the CC companies no money of any kind (aside from whatever you charge that month).

Re: Pay off CC Balance, all three bureaus drop score 7 points?

Insoc — Wed, 22 Feb 2017 21:34:55 GMT

@newhis wrote:
So if you have other cards with balance then that's not the problem.

Maybe paying your card triggered an alert, but the drop is not related to that.

Everything on the alert ties to the balance going to 0, that is what Fico is showing Merrick Bank Balance to $0.

Re: Pay off CC Balance, all EQ Score drops 7 points?

Insoc — Thu, 23 Feb 2017 01:11:10 GMT

@Anonymous wrote:
Hey Insoc. In case you are baffled by why everybody assumed you had one credit card, it's because you used the phrase "my one CC" in your original post. Thanks for following back up and clarifying that you had three.

Newhis is right. The act of paying off that particular card caused whatever credit monitoring system (CMS) that you use to send you an alert, notifying you that your balance had changed on that card. The alert also made your CMS pull your credit score again, which apparently had gone down.

But whatever made your score go down in the last several days had already happened before the CC balance was paid off -- it's just that whatever that was wasn't an alertable event.

You mention that you want to raise up your score so that you can get a fourth card. The best way to do that is to pay off another card and pay the remaining card down as much as you can (but leave a positive balance on it). This might take you a while, but if so that's ok. Just keep working at it. The goal for any person should be to owe the CC companies no money of any kind (aside from whatever you charge that month).

Sorry, I should have been more clear on that, I also corrected my first post and noted that only Equifax is showing this, TU and EX are not showing any alerts, maybe because Merrick doesn't use them?

I'm using the FICO Ultimate 3B and it only shows the drop due to the balance going to $0, no pulls are showing yet on my report.

I just paid off the balance within the past week, so that's why I'm no clear on why this happened?

I plan to pay down the other high balance, but want to get a better rated card.

Re: Pay off CC Balance, all three bureaus drop score 7 points?

Anonymous — Wed, 22 Feb 2017 22:07:34 GMT

When is the last time you saw this score (prior to the alert)?

Let's say (just to pick a date at random) that the last time your CMS told you your FICO 8 score for that specific bureau -- let's say it was 35 days ago.

What Newhis and I are saying is that in the last 35 days, something changed on your report. It might have been something very subtle. Even the grizzled veterans of this site (and I am not one of them) who have been reviewing their reports for years and have a very good eye for this stuff can easily miss ways that from the perspective of FICO something changed.

Lots of changes to your report are not alertable. So when this change (or changes) occurred in the last 35 days, you did not receive an alert for it.

Now that an alertable event (the CC being paid off) has occured, however, you are now finding out about the score change.

A lot of people buy the myFICO product thinking they will find out every time their score changes. They also think that whatever alert message they get will be the reason for any score change. Both assumptions are totally understandable. It's just that they are mistaken. You may decide that you don't like paying $30/mo given that, which is also ok. We can steer you toward other solutions that are cost free if that's what you want. No CMS will be a perfect fit, but there may be one that is better.

PS. What everyone on this thread can promise you is that you did a good thing by paying off that card. Paying down CC debt never ever lowers your score, except in weird cases like paying all your cards to $0. Keep plugging away at your debt until you get almost all of it paid off, pal!

Re: Pay off CC Balance, all three bureaus drop score 7 points?

Insoc — Wed, 22 Feb 2017 22:51:35 GMT

@Anonymous wrote:
When is the last time you saw this score (prior to the alert)?

Let's say (just to pick a date at random) that the last time your CMS told you your FICO 8 score for that specific bureau -- let's say it was 35 days ago.

What Newhis and I are saying is that in the last 35 days, something changed on your report. It might have been something very subtle. Even the grizzled veterans of this site (and I am not one of them) who have been reviewing their reports for years and have a very good eye for this stuff can easily miss ways that from the perspective of FICO something changed.

Lots of changes to your report are not alertable. So when this change (or changes) occurred in the last 35 days, you did not receive an alert for it.

Now that an alertable event (the CC being paid off) has occured, however, you are now finding out about the score change.

A lot of people buy the myFICO product thinking they will find out every time their score changes. They also think that whatever alert message they get will be the reason for any score change. Both assumptions are totally understandable. It's just that they are mistaken. You may decide that you don't like paying $30/mo given that, which is also ok. We can steer you toward other solutions that are cost free if that's what you want. No CMS will be a perfect fit, but there may be one that is better.

PS. What everyone on this thread can promise you is that you did a good thing by paying off that card. Paying down CC debt never ever lowers your score, except in weird cases like paying all your cards to $0. Keep plugging away at your debt until you get almost all of it paid off, pal!

Last night I checked it, was showing nothing, then his morning I got the alert dropped 7 points.

Merrick also provides the free "GoScore" ,which listed as being through TU, it's 10 points below the EQ FICO score, but did not drop yet, they normally update once a month but not always.

The history of this particular account is this:

January 2017

Paid off balance of $1,700.00, brought my account to $0

Scores rose when this was done.

February 2017

Made some purchases, balance of $800, one charge was disputed because I made a purchase online and did not get credited right away, the store credited me the amount and I cancelled the dispute, I then paid off the balance of $400 last week.

Current balance is $3.00, from some interest that rolled over before I paid it off.

Up until this point over the past 6 months prior, the balance was going down, no late payments or etc, I also got three CLI increases since last spring, all automatic.

It's possible a recent CLI is why, I did get a bump in credit (+$300) the end of January, Merrick gave it to me automatically which might have been related to a pull that was mentioned.

Re: Pay off CC Balance, all three bureaus drop score 7 points?

newhis — Wed, 22 Feb 2017 23:49:21 GMT

@Insoc wrote:
Sorry, I should have been more clear on that, I also corrected my first post and noted that only Equifax is showing this, TU and EX are not showing any alerts, maybe because Merrick doesn't use them?

I'm using the FICO Ultimate 3B and it only shows the drop due to the balance going to $0, no pulls are showing yet on my report.

I just paid off the balance within the past week, so that's why I'm no clear on why this happened?

I plan to pay down the other high balance, but want to get a better rated card.

Can you confirm that 'all three bureaus drop score 7 points' as you wrote on the subject?

Can you confirm that the card you paid, report to the 3 bureaus?

Re: Pay off CC Balance, all three bureaus drop score 7 points?

Insoc — Thu, 23 Feb 2017 01:13:29 GMT

@Anonymous wrote:
When is the last time you saw this score (prior to the alert)?

Let's say (just to pick a date at random) that the last time your CMS told you your FICO 8 score for that specific bureau -- let's say it was 35 days ago.

What Newhis and I are saying is that in the last 35 days, something changed on your report. It might have been something very subtle. Even the grizzled veterans of this site (and I am not one of them) who have been reviewing their reports for years and have a very good eye for this stuff can easily miss ways that from the perspective of FICO something changed.

Lots of changes to your report are not alertable. So when this change (or changes) occurred in the last 35 days, you did not receive an alert for it.

Now that an alertable event (the CC being paid off) has occured, however, you are now finding out about the score change.

A lot of people buy the myFICO product thinking they will find out every time their score changes. They also think that whatever alert message they get will be the reason for any score change. Both assumptions are totally understandable. It's just that they are mistaken. You may decide that you don't like paying $30/mo given that, which is also ok. We can steer you toward other solutions that are cost free if that's what you want. No CMS will be a perfect fit, but there may be one that is better.

PS. What everyone on this thread can promise you is that you did a good thing by paying off that card. Paying down CC debt never ever lowers your score, except in weird cases like paying all your cards to $0. Keep plugging away at your debt until you get almost all of it paid off, pal!

I checked my scores yesterday, no changes then I got the alert this morning.

The only thing I can think of is a CLI, automatic on Merrick Bank's part, I did not request it but they gave me three CLI increases since May 2016. The last one was only a $300 increase the end of last month.

I have no late payments, and paid off a higher amount of debt on this card last month that too it to $0, but did not see the same score drop.

Re: Pay off CC Balance, all three bureaus drop score 7 points?

Insoc — Thu, 23 Feb 2017 01:14:46 GMT

@newhis wrote:
@Insoc wrote:
Sorry, I should have been more clear on that, I also corrected my first post and noted that only Equifax is showing this, TU and EX are not showing any alerts, maybe because Merrick doesn't use them?

I'm using the FICO Ultimate 3B and it only shows the drop due to the balance going to $0, no pulls are showing yet on my report.

I just paid off the balance within the past week, so that's why I'm no clear on why this happened?

I plan to pay down the other high balance, but want to get a better rated card.

Can you confirm that 'all three bureaus drop score 7 points' as you wrote on the subject?
Can you confirm that the card you paid, report to the 3 bureaus?

Sorry about that, my mistake. I corrected it.

Only EQ dropped 7 points, nothing has yet been "alerted" for TU or EX.

I don't know if Merrick Bank reports to all, they use TU for the "GoScore".

Re: Pay off CC Balance, all three bureaus drop score 7 points?

SouthJamaica — Thu, 23 Feb 2017 03:58:21 GMT

@Insoc wrote:
@SouthJamaica wrote:
@Insoc wrote:
So I paid off a balance on my one CC, aroundr $400, Fico reports an alert that my scores dropped 7 points at all three bureaus. Why is this? I thought having low utilization = better scores?
I don't know how it works when you have just one credit card. But in my view, even if you did definitely lose 7 points because you reported a zero balance, it's worth it to have a zero balance 7 points is not that big a deal.

You could experiment. Let it report $50 one month, and zero another month, and see which one gets you the best score.

I don't have one credit card, I have 3 cards total right now, the other two have balances. Not 0% UTI

Since you have 2 other cards with balances, the paying off of the balance on the 3rd card did not cause your score to drop. It would have a positive effect on your score.

Re: Pay off CC Balance, all three bureaus drop score 7 points?

Insoc — Thu, 23 Feb 2017 04:41:19 GMT

@SouthJamaica wrote:
@Insoc wrote:
@SouthJamaica wrote:
@Insoc wrote:
So I paid off a balance on my one CC, aroundr $400, Fico reports an alert that my scores dropped 7 points at all three bureaus. Why is this? I thought having low utilization = better scores?
I don't know how it works when you have just one credit card. But in my view, even if you did definitely lose 7 points because you reported a zero balance, it's worth it to have a zero balance 7 points is not that big a deal.

You could experiment. Let it report $50 one month, and zero another month, and see which one gets you the best score.

I don't have one credit card, I have 3 cards total right now, the other two have balances. Not 0% UTI
Since you have 2 other cards with balances, the paying off of the balance on the 3rd card did not cause your score to drop. It would have a positive effect on your score.

I just pulled my Equifax Report, there is nothing on it showing any inquires by Merrick Banke for anything, CLI increases or etc., they must raise it based on account history and balance?

All data is showing as reported, nothing negative.

I don't know what caused it, I called and spoke with Merrick Bank today and they could not give me an answer, not that they have great customer service anyways, I'm using them for rebuilding and they do give modest CLI increases every quarter it seems.

Re: Pay off CC Balance, all three bureaus drop score 7 points?

Insoc — Thu, 23 Feb 2017 16:35:47 GMT

Got another alert this morning, EX dropped my score 8 points, because my Amazon Store Card balance went up $56.

Then I get another alert 1 hour later that my EQ score went up 19 points for my Amazon Store Card balance increase of $56.

All of this seems messed up, am I missing something here with how FICO does scoring?

Re: Pay off CC Balance, all three bureaus drop score 7 points?

Anonymous — Thu, 23 Feb 2017 18:59:43 GMT

I think it is the # of cards and % util. Just get only 1 to show a balance hopefully under 9%. I let my balances go natural but do pay biweekly. This past month I got killed on Disco and Citi DC as my % util went from 5% to 35% because of new purchases just before statements closed. I took at 22 point (vantage) hit for that.